Roma, Joanne P.

Accounting 107: Auditing Theory

Code of Ethics

The Philippines' Code of Ethics for Professional Accountants (Code) is based on

the International Code of Ethics for Professional Accountants (Code) developed by
IFAC. Accountants who are certified as professionals are referred to as CPAs (Certified
Public Accountants)

(CPA) and who hold a valid certificate granted by the Board of Accountancy,
regardless of whether they work in public practice (including sole proprietorships or
partnerships), industry, trade, the public sector, or education. When a national statutory
requirement conflicts with an IFAC Code clause, the national statutory requirement
takes precedence. In the few cases where a national law requirement overruled an
IFAC Code provision, the underlying intent of the IFAC Code was always followed.

This Code of Ethics is mandatory for all CPAs and is applicable to professional
services performed in the Philippines on or after January 1, 2004.

Section 110. Integrity

All professional accountants must be straightforward and honest in their

professional and business interactions in order to uphold the principle of integrity.
Honesty and fair dealing are also aspects of integrity.

Section 120. Objectivity

Objectivity requires all professional accountants not to risk their professional or

corporate reputations due to bias, potential conflicts of interest, or undue influence from
others.

Section 130. Professional Competence and Due Care

To give competent professional service to your clients or employers, the notion of

professional competence and due care demands you to maintain your professional
knowledge and abilities up to date. Furthermore, when delivering professional services,
they must work tirelessly to meet applicable technical and professional requirements.

Section 140. Confidentially

A professional accountant should maintain confidentiality even in a social

environment. The professional accountant must be on the lookout for the risk of
unintended disclosure, particularly if there has been a long relationship with a business
associate or a close or direct family member.

Section 150. Professional Behavior

Professional behavior necessitates that professional accountants observe all

applicable rules and regulations and refrain from engaging in any action that may bring
discredit to the profession. This includes behavior that a reasonable and informed third
party with all relevant information would judge has a detrimental influence on the
profession's reputation.

Section 220. Conflicts of Interest

Any danger should be reviewed by a professional public accountant. Before

accepting or maintaining a client connection or specific engagement, the professional
accountant in public practice must determine whether or not the professional accountant
in public practice has any business interests or ties with the client or a third party that
could constitute a threat. If the hazard is not visible, safeguards should be assessed
and applied as needed to eliminate or reduce it to a tolerable level.

Section 230. Second Opinions

Situations in which a professional accountant in public practice is asked to

provide a second opinion on the application of accounting, auditing, reporting, or other
standards or principles to specific circumstances or transactions by or on behalf of a
company or entity that is not an existing client may pose a threat to fundamental
principles compliance.

Section 240. Fees and Other Types of Remuneration

A professional accountant in public practice may offer whatever rate is

considered appropriate when discussing remuneration for professional services. It is not
unethical for one professional accountant in public practice to charge less than another.
However, the quantity of charges specified could jeopardize compliance with the
fundamental principles.

Section 250. Marketing Professional Services

When promoting professional services, a public accountant should avoid bringing

the profession into disrepute. A public accountant should be honest and truthful, and
should not make exaggerated claims for services done, credentials held, or experience
gained, nor should he or she make negative or unwarranted comparisons to other
people's work

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Section 270. Custody of Client Assets

A professional accountant in public practice should not take custody of a client's

money or other assets unless the law permits it and, if so, only in compliance with any
additional legal obligations imposed on the professional accountant in public practice
who holds such assets.